Increased integration

The enterprise application integration (EAI) market is expected to hit US$10.5 billion by 2006 estimates Gartner. US$300 million Tibco’s chief operating officer & executive vice president, Raj Mashurwala, talks to ACN and says conservation as increased customer demand and ever more devices add to the chaos. He also believes his company can help end users with the glue they need to integrate their enterprise apps.

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By  Maddy Reddy Published  August 26, 2004

|~|RajMashruwalla_coo_tibco_qa.jpg|~|Tibco’s chief operating officer & executive vice president, Raj Mashurwala.|~|ACN: Most companies in the Middle East are relatively new and still deploying their IT infrastructures. As such, there is less legacy and fewer disparate apps to integrate. With this in mind, how do you assess the Middle East enterprise application integration (EAI) market? Raj Mashurwala: There are more devices than ever before in the world. It’s no longer just desktop or server apps. You have mobile, networked devices, smart phones and handhelds running applications and there are continuous changes in terms of functionality. The chaos created by all these devices, with their complex interaction, will increase proportionately with a larger number of networked devices. As a result, the problem of integration is a much larger problem than EAI alone. We see EAI only as a subset; it only defines integrating enterprise applications. What the internet has done is that it has converted us into realtime babies, like little kids who are extremely impatient — they want something, they want it now. When a customer places an order, he doesn’t want to know tomorrow about its status and delivery. Customers want to know about it then and there. This realtime need, combined with the device chaos, will drive integration and we’re seeing this happen in the Middle East now. Customers are also looking at making the information in their middleware predictive so they can decide in realtime and serve customers better. ACN:Can’t users do that with a good customer relationship management (CRM) system? Mashurwala: No. CRM doesn’t do any analysis. CRM, in some ways, is a bit dangerous. All you do is collect all the information. It is not proactive enough. Companies may only analyse the data interactively. None of them do it in realtime yet. It’s still a database oriented model that takes a few minutes to run a query. Is that realtime? No. Our focus is reversed. It goes back to the push and pull model. As events occur, they push the information forward. A database model is like a phone that doesn’t ring. If the phone doesn’t ring, and somebody doesn’t call you [and you are expecting a call] then you are going to pick up the phone every few minutes and see if someone has called you. That’s not the most efficient way of doing it. In the events based model, only when something happens will the phone ring and you will react. Our job is not to just put the data in the database, but to analyse the events automatically. It’s the push model. That’s the philosophical difference we have. ACN:A lot of application vendors, such as IBM, SAP, Peoplesoft and Microsoft, are now active in the EAI space. How is Tibco different? Mashurwala:Yes, a lot of application vendors are now doing it. In traditional sectors such as the manufacturing sector, it’s the same and we don’t see any difference. But in the service sector such as banking, telecom, airlines, the service is critical. That’s why in such industries you don’t see SAP so much. For instance, banks may use their financial software, but the key differentiator is their service through ATMs etc. Here the processes are complex, different from one bank to another. The hardwired apps from other vendors are not just able to handle that. ACN:We’ve read about SAP and Microsoft’s collapsed merger. It’s similar to Tibco tying up with Siebel. Can we expect such a deal coming from Tibco? Mashurwala:We have a close relation with these vendors. But each of these application vendors is actually self centred. They want to be the centre of the universe. Go to SAP, or Microsoft or Oracle or any large enterprise vendor, and each one is fighting to be the centre of the universe. Each one is trying to fight to be there and that’s how they have designed their applications. Each vendor has its own data models and customers are confused. Hence we took a Switzerland or neutral approach, and want to seamlessly connect the data, not create any centre of the universe problems. ACN:But that’s what all the vendors say. Every one claims to do the same, and each vendor has their own software that promises to seamlessly integrate with competing vendor applications. Mashurwala: What really matters is what is the right and what is the wrong solution. You are not going to get neutral advice from a biased vendor. Every large enterprise in Dubai, on average, has at least 50 different enterprise applications. So, for example, what is SAP’s main job? To retire those applications and put their apps in there. If the customer decides not to retire those apps, who are you going to trust? Someone who is neutral, obviously. Neutrality is enormously critical. ACN: How about Microsoft, which is still not a large ERP vendor? It makes the platform, the tools and is now in the EAI space with Biztalk. Mashurwala: The issue of one shoe that fits everyone is the same. You can do integration as long as it’s Windows. How many Biztalk servers run on Unix machines? How many run on mainframes? None. It’s the same centre of the universe problem again. It’s got to be all Microsoft. As long as it’s Windows, and the platform they support then it’ll integrate. That’s not the problem the customer faces. ACN: But you still want to sell customers Tibco integration servers. You wouldn’t advise your customers to buy an EAI server from another vendor, would you? Mashurwala: But the difference with us is more interesting. What we have decided to do is be 100% different on a product level, not just externally, but based on standards. What we are generating is not proprietary to Tibco. Our focus is very standards based, not based on products. ACN: Most vendors support most standards today, so how do they differentiate themselves from the competition? Mashurwala: There are lots of legacy apps that do not support standards. There’s also a whole new generation of standards coming along. Technology will continue to change and [vendors] who support processes and standards with composite applications that can take business processes from one app to another like Lego blocks at an atomic level will remain at the forefront. ACN: Gartner estimates the EAI market to be worth US$10.5 billion in the next two years. If the market is so big, then why is Tibco [with 20 years of operations] still reporting revenues of less than US$300 million? Mashurwala: That US$10 billion includes hardware, services and other things. The Gartner number for software is around 15% or 18%. We are a part of the middleware market. If you look at the integration space in that it’s even smaller. We’re still in a very early stage of the market and it is fragmented. Over the next few years we will probably see two vendors emerge: IBM and us. Once the market matures there will always be one or two vendors who dictate the market. ACN: What about the other 60 to 70% market share in the EAI space? Mashurwala: The problem with other vendors is that there is no estimate. It took a few years for other vendors such as IBM to get their market share numbers and someone to figure it out, since they don’t sell EAI separately. They sell it with hardware, other software and services. My guess is that Microsoft is at a similar stage. ACN: With more than 60 odd vendors of all sizes in this market, do you think there will be some consolidation? Mashurwala: There has been consolidation. We bought a few smaller vendors recently. In fact, there are lot of markets we need to tap [through acquisitions]. For instance, Japan is the second largest economy in the world and we don’t get the revenues from it that we should. There are lots of cultural issues to deal with. Companies like IBM, with their wide spread networks, can tackle such markets regardless of product quality. ACN: Do you have any plans to expand your partner network in the Middle East? Mashurwala: No. Quality is paramount to us. Tibco currently operates through one partner here [Mena eSolutions]. We don’t want dissatisfied customers, nor do we want to have thousands of sales staff. ACN: Of your 2000-plus customers worldwide, how many of them are from the GCC or the Middle East region? Mashurwala: There are a few, which have been publicly announced. We’re growing 100% year on year. A majority of our customers are very large deals from tier one players from each sector. To us a few satisfied customers [talking about us] from wherever we have a presence is more valuable than billboard advertisements. ||**||

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